For only the sixth time since 1970, Mississippi collected less in tax revenue than it did the previous fiscal year, according to the latest report from the state’s Legislative Budget Office. 

The report says Mississippi collected around $64.3 million, or .83%, less than it did the last fiscal year. In Fiscal Year 2024, the state collected around $7.7 billion, while it collected $7.64 billion for Fiscal Year 2025. The budget cycle runs from July 1 to June 30.

The main reason the state is taking in less money than it did last fiscal year is that it collected $232.5 million, or 24%, less from corporate income taxes than it did last year. The state collected more sales taxes, individual income taxes and use taxes than last year. 

Despite the slump in revenue, state government is still living within its means and is collecting more than lawmakers who set the state budget had estimated. 

The Joint Legislative Budget Committee, a group of 14 lawmakers, had estimated that Mississippi would collect $7.6 billion in taxes. Since the state had a lower estimate, it collected $41 million more than it projected. 

Even with the low $7.6 billion estimate, the Legislature during a May special session voted to adopt an even lower $7.1 billion state budget, meaning it left around half a billion dollars unencumbered. 

Still, the fact that the state is receiving less money could be an early sign of recession, or that massive tax cuts passed in recent years and still being phased in are not stimulating economic growth like proponents of the cuts hoped.

Mississippi is continuing a years-long phase out of its franchise tax, which is part of the corporate income tax, and has been cutting its individual income tax. The franchise tax will be eliminated in the next few years, and the already low individual income tax will be phased out over more than a decade. 

Over the last few years, the state has seen increased revenue and lawmakers have increased spending, largely due to unprecedented federal spending and handouts to states for economic stimulus and recovery from the global pandemic. The new Trump administration in Washington is working to cut federal spending and in some cases rescind money already allocated to states.

Members of the state’s joint budget committee will meet in the fall to hear from some agency leaders about their budget needs and begin crafting a state budget for the next fiscal year.